Here are some interesting or useful articles that I found recently.
China’s Young Men Act Out in Factories
This BusinessWeek relates how different the new generation of Chinese workers is from the previous one. It also focuses on the effects of an increasingly male worker population.
Plying Social Media, Chinese Workers Grow Bolder in Exerting Clout
This New York Times article explains how the strikers at the Yue Yuen factory last month took advantage of WeChat for easier coordination. Social media will make strikes easier to pull off in the future, without the need for visible leaders.
New labour – The workshop of the world is buying more robots
Week In China (an HSBC publication) looks at the case for Chinese manufacturers to invest in robots in order to replace workers. In certain cases, back-of-the-envelope calculations do not make sense.
It cites two cities (Guangzhou and Luoyang) that are setting up R&D and production centers for robots. This industry is considered strategic by the government, it seems.
The man who made geography history
This Wired article is a presentation of Liam Casey, the founder of PCH International, and of his company. It details their drop-shipping operations in Shenzhen’s free-trade zone as well as their ambitions in helping hardware startups. And it makes for a fun read.
Red Flags in China Manufacturing
Jacob Yount made a great list of responses importers are afraid of hearing. It is instructive as well as entertaining. Among others, you will learn why “it’s difficult” is worse than “we’ve never done this before”.
How To Avoid A Made In America Lawsuit For Your Made In China Product
Dan Harris wrote great advice for importers who want to reduce their risks, in 6 points:
- Know your suppliers
- Quality control
- History
- Contracts
- Insurance
- Marketing
Overview of the China’s electronic assembly industry
Etienne Charlier shares his knowledge of the EMS industry:
- The actors in the supply chain
- The industries and applications they target
- The main types of suppliers in China
Fair enough – Guangzhou’s trade gathering is no longer the only game in town
Week In China describes the decline of the role of the Canton Fair in China’s exports. Not only are much fewer contracts signed on the spot than 15 years ago, but also the number of visitors has been dropping.
A good compilation of material, Renaud. The article “Fair Enough” is very insightful about the evolution of the Canton Fair. As the world is shrinking more and more because of the internet, it’s interesting how the fair is losing attendees because of the online sales channel…
Caution for all buyers ever waits around the corner, though.
I’ve seen numerous occasions as I’m sure you have where a buyer goes to a fair, spends much time in a booth getting to know the supplier, getting to the know the product and confirming specs. Once the buyer got back to their home country and contacts the supplier, the supplier had no clue who the buyer was. The person working the booth was a local university student they hired who spoke good English.
Also, all the specs he confirmed were wrong….
Thanks Jacob.
Online sales channels might be the major cause of the drop in attendance. But I think most importers have their supplier network established and don’t prospect for new suppliers as much as they used to.
Incredibly inspiring story about Liam Casey. Kept me up way too late last night! I’d like to see more of this. Would be interesting to hear about how other people, you for example, got started in China.
Yes, very inspiring. But it seems like he took huge risks and got very lucky. So there are probably 50 other guys who did things the same way, and Casey is the only one who “survived” 😉
True, but among those 50, there are plenty who are still making millions, and even more who are living well from their business. It’s not a zero sum game and you can still live a good life even if you don’t got 2 billion dollars on your bank account. 100-200 million is enough;)
Liam Casey and PCH are an old Dezan Shira & Associates client. We’ve seen them grow from a tiny 3 person RO – I personally did the original registration, and even helped him recruit his first staff – to where there are today. There are indeed a few people who made it from that time. The trick was going to Shenzhen when everyone else wanted to be in Shanghai. That and the low tax rates on offer in those days was the springboard for the success of companies such as PCH, and Liam kind of hit it on the head in his wired article about the geographical aspect.
Wow, interesting.
I guess being in Shenzhen was rather obvious for companies involved in electronics. But maybe that wasn’t obvious in the late 90s.
Well it was obvious because a lot of the Taiwanese and Hong Kongese were doing it, and the tax situation was better than anywhere else in China at that time. But the majority of expats wanted t go to glamorous cities like Shanghai and Beijing, and missed the chance. Liam Casey wasn’t the only guy to have made it though, there were plenty of others. The difference is that they sold out to much larger companies over the years whereas Liam has built up PCH. There are China expats such as Don St. Pierre (ASC Wines) and Cyrille Eltschinger (IT United) – all Dezan Shira clients who eventually sold their businesses for many millions of dollars. I know, I did their original set ups and their acquisition deals! But people tend to forget who used to be in China and have now moved on elsewhere, becoming very wealthy individuals in the process. But for sure Shenzhen was the breeding ground for many expatriate entrepreneurs back in the day. China helped make a great deal of those early pioneers very rich indeed. I don’t think a lot of that can be duplicated now, the opportunity cost is too expensive in China today to start with a RO and subsequently grow it into a multi-million dollar business.